filantropía transformadora – inversión de impacto jed emerson january 27, 2012

Filantropía Transformadora

– Inversión de Impacto

Jed Emerson

January 27, 2012

“Try not to become a man of success, but rather try to become a

man of value.”

The Bifurcated World

The only

purpose of

business and

investment

is to make

money

The only tools for solving social challenges are

donations and subsidy

The Bifurcated World works…as long as you stick to one side

•Laws and regulations•Education and career paths•Metrics and measurement

•Capital markets•Philanthropy

A Blended Value Perspective

• Value is whole and non-divisible• Business can make an effective and morally legitimate

contribution to solving social challenges; NGOs have capacity to leverage economic tools.

• Investors may actively target social and environmental value creation in their for-profit investments.

• There is a capital continuum and flow of organizational form, with various structural options for maximizing total performance with multiple returns.

A Winning Philanthropic Business Model?

“For every dollar you donate, 95 cents is invested in the pursuit of financial return and a nickel is invested in our business…

(Insert your business here: Small Business Development, Education, Social Change, Environment, Economic Development…)

What Percent of Your Capital is Advancing Your Total Mission?

95% of your assets are, at best, neutral to your institution’s mission….

….while 5% of your assets drive 100% of your mission.

The New Golden RulePortfolio size does not define the

breadth of one’s vision nor determine the tools you may use

to create the future you desire

Wealth Management and Fiduciary Translation: Your financial AUM and charitable Payout

are not your current value nor your future potential!

Spectrum of Social & Financial Objectives

9ImpactAssets

Grant(Program)

AvailableCapital

Grant(Infrastructure)

Grant(Research andDevelopment, Seed Funding)

PRIs andRecoverable

Grants

FROI Risk Boundary

RiskFree Rate

TreasuryNotes,

Community CDs, ImpactInvestment

Bonds

Traditional Diversified Investment Portfolio

VC FundOr AngelInvesting

Privateand PublicEquity Investing

SociallyResponsibleAngel andSocialVentureCapitalFundInvesting

SROI Risk Boundary

A Unified Investment Portfolio

(Impact Investing Vehicles)

Sizing the Market

• JPMorgan: Predicts that by 2020 there could be between $400 billion and $1 trillion invested this way, generating cumulative profits over ten years of between $183 billion and $667 billion. – The Economist, Happy Returns: Birth of a New

Asset Class, 9/9/2011

Impact Investment Managers– Manages $150 mm in debt and equity funds

investing in a global portfolio of microfinance institutions with consistent financial performance since inception in 2004.

– Has deployed over $ 170 mm in working capital financing to Fair Trade farmer cooperatives in the developing world using debt capital provided by investors with no defaults since inception in 1999.

– Manages $500 mm+ in community development loans to social enterprises in the U.S. and the developing world; issues 1-10 year Community Investment Notes to investors with no defaults since inception in 1995.

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Impact Investing for Blended Value: Pioneering a New Integrated Path

1,000 bankers volunteered within a week of impact investing unit creation

Social enterprise the most popular club at top business schools

Impact Investing for Blended Value: The Power to Transform our World

Implications of Impact Investing for Colombia:How will we...

…Regulate investment?

…Develop transformational leadership?

…Measure value?

…Unlock philanthropic capital?

…Move the money?

The Impact Investing wave is upon us:will we capture its potential ?

?

What is it going to take for Colombia to Capture its Full Potential?

Seek out unusual bedfellowsOpenness

Break molds, challenge assumptionsSpirit

Watch the grass growPatience

Separate the wheat from the chaffDiscernment

Avoid becoming “the new Them”Humility

Resist idea inflationDiscipline

www.impactinvestingbook.comTwitter: @blendedvalue

@ablimpactFacebook: Impactinvestingbook

Gracias!

Jed Emersonjed@blendedvalue.net